Strategic Marketing Management
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Chapter 22 : Designing an Effective Marketing Organization
Considerations in Organization Design
Internal and External Organizations
Vertical Structure
Horizontal Relationships
Speed of Response
Managing the Operating Environment
Organizational Design Options
Traditional Marketing Organizations
New Forms of Marketing Organizations
Selecting an Organization Design
Organizing Marketing Activities and Structure
Marketing Environment and Structure
Innovativeness and Structure
Global Dimensions of Organizations
Considerations in Global Organizations
Types of Global Organization Structures
Chapter Summary
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Organization structure is the formal and informal framework within which
people work to achieve organizational objectives. Designing and implementing
a suitable organization structure is necessary for the implementation of
marketing strategy. Aspects like internal and external organizations,
vertical structure, horizontal relationships, speed of response, managing
the operating environment, etc. are the major considerations to be made in
the design of a marketing organization. The options that are available for
designing the marketing organization can be grouped into traditional
structures and new forms. Traditional structures include functional,
product, market, and matrix organizations. A functionally organized
structure is organized on the basis of various functions like marketing,
production, research and development, and finance. In product organization,
structure is determined by the type and number of products that the
organization has. Market organization is organized into geographical units
that report to a central corporate headquarters. A combination or matrix
organization is a combination of the functional and product forms of
organization. |
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The matrix structure helps in achieving the advantages of each of these
organizational structures. Types of matrix structures include functional
matrix, project matrix, and balanced matrix structures.
In selecting an organization design, the factors that are to be considered
include the market and environmental situation, organizational
characteristics, and the marketing strategy generally adopted by the
organization. Implementation of the marketing strategy is affected to a
great extent by how the marketing activities are organized. There are
basically four kinds of organizing concepts typically used in marketing –
bureaucratic, transactional, corporate, and relational. The environmental
condition also influences the structure adopted by the organization.
Organizations operating in global environments have to design the structure
keeping in mind the market conditions in which they operate. Global
organization restructuring involves steps like identifying the need for
restructuring, integration of organizational functions, and identifying the
most effective structure. Multinational organizations go in for various
structures like domestic organization, volume expansion, resource
acquisition, and international division.
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